BoJ unexpectedly tweaks YCC: widens 10yr yield band to +/-0.5% (prev. +/-0.25%) to increase bond purchases to JPY 9tln/m (prev. 7.3tln/m) in Q1; keeps rate unchanged with rates at -0.10%, and maintains 10yr JGB yield target around 0% as expected

YCC

• Decision unanimous.
• Will review operation of Yield Curve Control (YCC)
• 10yr yield can move freely between -0.5% and +0.5% (prev. +/-0.25%)

JGB PURCHASES

• To conduct additional JGB purchases on Dec 22
• To make nimble responses for each maturity by increasing the amount of purchases even more and conducting fixed-rate purchases operations when deemed necessary.
• Will buy JPY 200-400 of 1yr-25yr JGBs in Jan-Mar.

MARKET COMMENTARY

• Volatility has increased since spring.
• Japan's market functioning has declined
• Japan's economy is expected to recover as the impact of the pandemic and supply constraints subside.

GUIDANCE

• Rate guidance unchanged; expects short and long-term policy rates to remain at present or lower levels.

Via BoJ